November 1, 2010 / 5:55 PM / in 7 years

Mauled Canadian autobelt gets green energy lift

OTTAWA/VANCOUVER (Reuters) - For years the Windsor Tool & Die factory, a stone’s throw from the U.S.-Canada border, stood vacant, a testament to the breakdown of North America’s auto industry.

But last summer a group of former auto workers in Windsor, Ontario, a one-time Canadian car-making mecca just across the river from Detroit, rolled up their sleeves to scrape off the plant’s decades of grime.

The aim wasn’t to revive production of the auto machining parts the shop was once known for. Instead it got a new lease of life as a showroom and warehouse for the solar-power and solar water-heating systems sold by Green Sun Rising Inc, which is run by Klaus Dohring, who worked in the auto industry for 25 years.

Green Sun Rising, like dozens of other small businesses in Ontario, is taking advantage of the provincial government’s Green Energy Act, which was put in place last year and pays the richest, long-term rates in North America for energy from renewable sources like the sun, wind and biomass.

The plan helps the Liberal government of Canada’s most populous province meet a pledge to shut all coal-fired power stations by 2014.

Equally central to the plan is the creation of a manufacturing hub for equipment such as wind-turbine blades and solar-panel parts, which officials hope will spawn 50,000 jobs and revive areas hard hit by the near collapse of the North American-based auto industry two years ago.

“We started out the two of us, and immediately people found us. We weren’t even looking for people, because we couldn’t afford them,” said Green Sun Rising vice president Tanja Nuske, Dohring’s wife and co-founder of the company.

TIMES HAVE CHANGED

Ontario, Canada’s economic heartland, lost 22,000 auto-sector jobs between October 2008 and July this year, according to the Canadian Auto Workers (CAW) union.

“Gone are the days where we’re going to see ... a large automotive assembly plant show up and create 1,500 jobs at a time,” said Patrick Persichilli, vice-president of the Windsor Essex Economic Development Commission.

In its darkest hour in May last year, more than 15 percent of workers in Windsor were unemployed, giving Canada’s southernmost city the dubious honor of the highest unemployment rate in the country.

Persichilli estimates that of the 6,000 new jobs created in Windsor in the past 10 months as the economy slowly recovers, 5 to 10 percent are tied to renewable energy.

He is confident that will grow as five solar companies have now announced manufacturing plans for the area.

To qualify for long-term provincial power contracts, renewable energy companies must use some equipment manufactured in Ontario. For large solar projects, the quota is a steep 50 percent, increasing to 60 percent in 2011.

But job creation is a slow climb as the green energy sector is just starting up and many companies such as Green Sun Rising employ just a handful of people.

“Every week there’s something new coming in -- it’s a substantial growth stage, so it’s too soon to really measure,” Ontario Energy Minister Brad Duguid told Reuters last month.

Dave Gerwing, chief executive of Menova Energy Inc, which makes parts for solar-panel mounting systems, is already enjoying the green plan’s benefits. Menova’s revenue has increased almost 50 times and it has tripled the space it occupies in a former Toronto area auto-parts plant.

“The long term benefits of this are massive -- particularly when the gold rush is over and we flip over into export mode,” Gerwing said. “Then we will have residual jobs that just wouldn’t have existed (otherwise).”

DOUBTS REMAIN

Not everyone is giddy about the jobs promise, however.

University of Waterloo, Ontario, professor Jatin Nathwani points to research from Germany and Spain that shows that these pioneer clean-power countries did not generate a gush of new jobs when they started offering above-market prices for green energy.

CAW President Ken Lawenza worries that the job creation will come too late for many highly skilled auto workers, who have been laid off and are nearing retirement.

Lawenza is also not convinced green-collar jobs will match auto manufacturing wages, which average C$21 to C$22 an hour.

“The jury is still out,” he said. “I have confidence that the jobs are going to follow, where I don’t have confidence is in what type of jobs they are.”

($1=$1.02 Canadian)

Editing by Peter Galloway

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